Brazilian Development Bank President Visits AfDB to Explore Cooperation Opportunities

The president of the Brazilian Development Bank (BNDES), Luciano Coutinho, on a two-day visit to the African Development Bank (AfDB) in Tunis, said he was “very keen to understand how we can work together”.

Mr Coutinho was speaking at a joint meeting of senior management from both banks on 26 April. He and the AfDB president, Donald Kaberuka, who chaired the meeting, had earlier met in Davos in January 2012, and had agreed to have a follow-up discussion to explore cooperation possibilities.

Mr Coutinho gave a presentation on the operations of BNDES. He said the bank was celebrating its 60th anniversary this year, as BNDES had been established in 1952. It was originally set up, he said, to support the building of infrastructure in the Brazil.

“At the time, Brazil badly needed infrastructure,” he said. From the 1950s, BNDES supported the building of hydro-power plants, railways, highways, ports, transmission lines and iron ore facilities, he said. It financed almost all the infrastructure from that decade to the 1980s, and still concentrates heavily on infrastructure projects, he added.

BNDES expanded as the demand for infrastructure in Brazil grew. BNDES is spending about USD40 billion a year on infrastructure projects, he said, and its involvement in the sector continues to grow. It accounts for about 40 percent of all disbursements, and will continue to do so, said Mr Coutinho.

“We have a pipeline of 140 infrastructure projects. It’s a big pipeline of projects,” said Mr Coutinho.

Over the next two years, he added, infrastructure work will expand by 25 percent each year, with special attention being paid to the north east of Brazil.

In total, BNDES makes annual disbursements of USD 85 billion, Mr Coutinho informed the delegates, adding that its total assets were approximately USD 450 billion and that figure would approach USD 500 billion “by the end of the year”. BNDES has 2,500 employees, he said.

Industry was another sector that commanded a lot of support from BNDES, continued Mr Coutinho. The Brazilian Development Bank supported all heavy industry in the country, he said.

That included steel, petrochemicals, pulp and paper, aluminium, non-ferrous metals, trucks and buses, and so on.

“Brazil has a very efficient truck and buses sector,” informed Mr Coutinho, and BNDES funds it. His bank intends to remain a key supporter of investment in industry. At the moment, he said, it accounts for about USD 40 billion in support – the same as infrastructure.

However, he said, BNDES also supports small firms. BNDES has created a system of credit cards for small firms to use to access goods and services, and so far it has issued about half a million of these cards, he told delegates.

Mr Coutinho said BNDES supports sustainability, innovation, and entrepreneurship. It also has green initiatives, such as a Climate Change Fund and an Amazon Rainforest Fund.

Moving on to the subject of Africa, Mr Coutinho said BNDES wishes “to be close to the AfDB”. Because BNDES needs to know more about Africa, the AfDB was an “ideal partner. We should learn and understand. We value very much the expertise of the African Development Bank.”

Mr Kaberuka agreed, saying; “We are smaller but very effective, and need to cooperate with you.”

In fact, BNDES is already involved in some projects in Africa, informed Luis Eduardo Melin, BNDES’s managing director for the foreign trade division and international division. BNDES has projects totally valued at between USD 7 and 8 billion in Mozambique, Angola, Guinea, South Africa and Ghana.The Brazilian Development Bank, he said, was also in consultations in Nigeria.

Mr Kaberuka and his staff later made a presentation on the operations of the African Development Bank to the Brazilian Development Bank president and his delegation.